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Shunned for decades for refusing to relinquish its nuclear weapons programme, India was finally welcomed as a member of the global nuclear club last year when the US dropped long-standing sanctions.
International companies are now flocking to capitalise on the business opportunities in a country struggling to meet energy demand.
India has about 4,000MW of installed nuclear power capacity, with another 2,600MW under construction. But its national energy plan calls for 30,000MW of nuclear power by 2020, 63,000MW by 2030 - and 250,000MW by 2050.
This week about 30 US-based nuclear energy companies, including GE, Westinghouse, Bechtel, Babcox & Wilton and Shaw Power, are meeting Indian officials and the Nuclear Power Corporation of India to discuss how they can help New Delhi meet these massive power needs.
"These are eye-popping numbers," says Ted Jones, a director of the US-India Business Council, which is leading the delegation. "We are here to demonstrate that we are capable, reliable partners for India as it builds out its nuclear sector."
Yet foreign companies - especially privately owned US groups - are likely to find profiting from India's thirst for power an arduous process, as New Delhi grapples with sensitive questions of how much foreign involvement it will permit in its nuclear energy sector.
"The hype on the deal, that it is going to open up tens of billions of dollars of business to the US, is just that - hype," says Brahma Chellany, director of the New Delhi-based Centre for Policy Research.
India's Atomic Energy Act restricts ownership and operation of nuclear power plants to government-owned companies, and any amendment to open the sector to even limited foreign ownership is likely to trigger heated parliamentary battles.
US companies are also unwilling to conduct any nuclear commerce with India until New Delhi adopts internationally binding legislation that would limit their liability in case of a nuclear accident, another potentially contentious political issue.
"India has been very accustomed to doing these through its state-owned companies or dealing with foreign state-owned companies," Mr Jones says. "To induce the participation of private companies, they need to...create an enabling framework."
The NPCI, which operates India's existing nuclear power plants, has been working with Russia's state-owned AtomStroyExport to build two 1,000MW reactors, projects that predate the old sanctions and were thus permitted to proceed.
The Russian agency is also expected to help the NPCI on at least two more plants at the same site. Likewise, the NPCI has an initial agreement to acquire technology from France's state-controlled nuclear company Areva.
Yet after 30 years of building and operating nuclear power plants in almost total isolation, elements within India's nuclear and security establishments remain ambivalent on the potential role of foreign companies.
Last year Anil Kakodkar, chairman of the Atomic Energy Commission, publicly cautioned that foreign co-operation should not erode India's nuclear technology capacity. He also expressed concern at the potential for intellectual property disputes, with foreign companies claiming indigenous Indian technology as their own.
"The motto of self-reliance is not just a slogan," he warned. "It is an important element of our technological march and our ambition to lead the world."
India's Congress-led government, which pushed through the nuclear deal with the US, has yet to unveil its proposed legal framework for foreign participation in the nuclear sector. But local media have reported that the current draft law would limit foreign companies to activities such as plant construction, fuel supply and maintenance, but would not permit foreign equity stakes in nuclear power plants.
That restriction, says V. Raghuraman, a principal adviser to the Confederation of Indian Industry, would serve as a significant constraint on development as the government struggles to raise adequate resources to realise its nuclear ambitions.
It is a prospect that dismays power-starved Indian industries.
It will be years before any nuclear power plants are built in India with western help even after the deal with the US to end decades of international sanctions.
But last year's deal, which ended the sanctions stemming from New Delhi's nuclear weapons programme, will bring some immediate benefits. India's power sector can obtain fresh fuel for its reactors and companies can gain access to advanced technologies in areas such as avionics, satellites, precision engineering, computing, nuclear medicine and even biotechnology.
Suhaan Mukerji, principal associate at Amarchand Mangaldas, a law firm, said: "If you can access the best technologies across the world, it makes your industry more competitive."
Under the sanctions, nuclear fuel and a range of technologies with civilian and military applications were denied to Indian agencies and companies on the grounds they could be diverted to the nuclear weapons programme.
That has left India's reactors operating at less than 54 per cent of their installed capacity due to fuel shortages, while companies have griped about the drag on growth and development.
"A lot of sectors have suffered because of the ban on dual-use technology," said Mr Mukerji. With sanctions lifted, New Delhi is courting potential uranium suppliers such as Uzbekistan, Niger and Mongolia to secure long-term supplies.
Indian companies still cannot shop freely in the global technology supermarket until countries revise their export controls, but Mr Mukerji said that process should be relatively quick. "The biggest hurdle is already overcome."
Copyright The Financial Times Limited 2009
